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Summarised Financial Results For The Year Ended 31 August 2017 And Maiden Cash Dividend Declaration
Premier Fishing and Brands Limited
(Previously Premier Food and Fishing Limited)
(Incorporated in the Republic of South Africa)
Registration number 1998/018598/06
Share code: PFB and ISIN: ZAE000247516
("Premier " or "the Company" or "the Group")
Summarised preliminary consolidated financial results for the year ended 31 August 2017
Highlights compared to the prior year:
- Successfully listed Premier during the year under review
- Capital raised on listing of R526.5 million
- Revenue increased to R411 million from R402 million
- Profit after tax increased by 31% from R52 million to R68 million.
- Achieved our expectation of R66m profit after tax per the pre listing statement.
- NAV increased by 143% to 3.83 cents
- Dividends of 15 cents per share declared to shareholders.
Premier was listed on the main board of the Johannesburg Stock Exchange ("JSE") on 2 March 2017. In preparation
for the listing, on 1 February 2017, there was a subdivision of the authorised and issued shares of Premier in which
one share was subdivided into 1 430 000 shares. The issued share capital of Premier increased from 100 ordinary shares
to 143 000 000 shares on that date. Subsequent to the above mentioned capital raise the total issued shares increased
to 260 000 000. The earnings per share and headline earnings per share have been calculated taking into account the
subdivision of shares.
Summarised Audited Consolidated Statement of Comprehensive Income
For the year ended 31 August 2017
Audited Audited Change
year ended 31 year ended 31 %
August 2017 August 2016
R'000 R'000
Revenue 410 733 401 692 2
Cost of sales (230 586) (239 098) (4)
Gross profit 180 147 162 594 10
Other operating income 1 249 2 647 (53)
Other operating expenses (116 245) (100 085) 16
Operating profit 65 151 65 156 -
Investment revenue 33 015 11 349 191
Finance costs (3 323) (2 986) 11
Profit before taxation 94 843 73 519 29
Taxation (26 743) (21 411) 25
Profit for the year 68 100 52 108 31
Total comprehensive income for the year 68 100 52 108 31
Profit after tax attributable to :
Shareholders of Premier 68 100 52 108 31
Basic and diluted earnings per share (cents) 33,77 36.44 (7)
Basic and diluted headline earnings per share (cents) 34,59 36.73 (6)
Weighted average number of shares 201 660 143 000
Summarised consolidated Statement of financial position
At 31 August 2017
Audited as at Audited as at
31 August 2017 31 August 2016
R'000 R'000
ASSETS
Non-Current Assets 230 157 221 262
Property, plant and equipment 130 107 124 596
Goodwill 18 165 18 165
Intangible assets 62 41
Loans to group companies 81 758 78 396
Deferred tax 65 64
Current Assets 730 806 163 553
Inventories 43 083 42 379
Other financial assets 1 707 1 065
Trade and other receivables 89 620 48 270
Biological assets 54 323 48 169
Current tax receivable 154 154
Cash and cash equivalents 541 919 23 516
Total Assets 960 963 384 815
EQUITY AND LIABILITIES
Share capital 507 517 -
Reserves 8 014 8 014
Retained income 255 566 217 466
Total equity 771 097 225 480
Non-Current Liabilities 82 310 85 871
Other financial liabilities 7 651 10 764
Operating lease liability 1 243 2 065
Post-employment medical costs 1 075 1 153
Deferred tax 72 341 71 889
Current Liabilities 107 556 73 464
Trade and other payables 55 455 53 243
Loans from group companies - 1 478
Other financial liabilities 3 419 3 280
Current tax payable 21 752 8 119
Provisions 8 944 7 344
Bank overdraft 17 986 -
Total Equity and Liabilities 960 963 384 815
Net asset value per share (cents) 382,37 157,68
Net tangible asset value (cents) 373,34 144,95
Total liabilities excluding deferred taxation: Total equity (%) 15 39
Total borrowings: Total equity (%) 25 71
Summarised Consolidated Statement of Changes in Equity
For the year ended 31 August 2017
Audited Audited
year ended 31 year ended 31
August 2017 August 2016
R'000 R'000
Balance at the beginning of the year 225 480 197 372
Profit for the year 68 100 52 108
Issue of shares 507 517 -
Dividends (30 000) (24 000)
Balance at the end of the year 771 097 225 480
Comprising:
Stated capital 507 517 -
Reserves 8 014 8 014
Retained income 255 566 217 466
Summarised consolidated Statement of cash flows
For the year ended 31 August 2017
Audited Audited
year ended 31 year ended 31
August 2017 August 2016
R'000 R'000
Cash flows from operations 40 094 68 381
Interest income 17 446 1 357
Finance costs (3 323) (2 830)
Tax paid (12 659) (8 876)
Cashflow from operating activities 41 558 58 032
Cashflows used for investing activities (45 692) (39 951)
Purchase of property, plant and equipment to
sustain operations (14 066) (9 295)
Purchases of property, plant and equipment to
expand operations (7 995) -
Purchase of other intangible assets (27) -
Loans received from group companies - 10 000
Loans advanced to group companies (21 485) (42 020)
Loans to group companies repaid - 10 000
Repayment of loans from group companies (1 478) (8 678)
Repayment of financial assets - 42
Advances to other financial assets (641) -
Cash flows from financing activities 504 551 9 862
Proceeds on share issue 526 500 -
Share issue costs (18 983) -
Proceeds from other financial liabilities - 12 548
Repayment of other financial liabilities (2 966) (2 686)
Net increase in cash and cash equivalents 500 417 27 943
Cash at the beginning of the year 23 516 (4 427)
Net cash and cash equivalents at end of the year 523 933 23 516
1. BASIS OF PREPARATION
The summarised preliminary consolidated financial statements were prepared in accordance with the JSE Limited Listings
Requirements ("JSE") and the requirements of the Companies Act, 2008 (No. 71 of 2008), as amended, applicable to summarised
financial statements. The JSE requires summary financial statements to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 - Interim Financial Reporting. The accounting policies applied in the preparation of the summarised
consolidated financial statements are in line with IFRS and are consistent with the accounting policies applied in the preparation
of the previous consolidated annual financial statements.
The summarised preliminary consolidated financial statements were prepared under the supervision of the Group Chief Financial
Officer, Isaiah Tatenda Bundo BCom , CA(SA).
This summarised report is extracted from the audited consolidated financial statements, but is not itself audited. The consolidated
financial statements were audited by the Group's external auditors, Grant Thornton Cape Inc., who expressed an unmodified opinion
thereon. The audited consolidated financial statements and the auditor's report thereon are available for inspection at the Company's
registered office and on the Company's website: www.premierfishing.co.za. The auditor's report does not necessarily report on all of
the information contained in this announcement. Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial information
from the Company's registered office. The directors take full responsibility for the preparation of the summarised consolidated financial
statements which has been extracted without adjustment from the underlying audited consolidated financial statements.
Any reference to future financial performance included in this announcement has not been reviewed or reported by the Company's auditors.
The audit was conducted in accordance with International Reporting Standards on Auditing.
2. SEGMENTAL RESULTS
Revenue Audited Audited
Year end 31 Year end 31
August 2017 31 August 2016
R'000 R'000
Lobster 190 589 190 110
Pelagics 80 778 93 670
Hake 31 210 31 110
Squid 34 428 23 541
Abalone 36 186 39 697
Cold storage 9 555 8 720
Seagro 5 174 2 717
Processing and marketing 26 909 15 959
414 829 405 524
Less inter segmental sales (4 096) (3 832)
Total 410 733 401 692
Segmental profit
Lobster 52 106 46 446
Pelagics 23 636 33 406
Hake 12 013 9 794
Squid 10 916 4 360
Abalone 13 241 13 015
Cold storage 332 303
Seagro 1 013 701
Processing and marketing 6 996 3 860
120 253 111 885
Administration and support services (61 255) (48 864)
Fair value gains 6 153 2 007
Interest income 33 015 11 477
Finance costs (3 323) (2 986)
Total 94 843 73 519
Total Assets
Lobster 75 140 69 106
Pelagics 94 743 82 448
Hake 15 935 11 624
Squid 10 701 6 047
Abalone 84 216 78 113
Cold store 628 1 038
Seagro 6 181 2 312
Processing and marketing 35 358 20 726
Administration and support services 637 996 113 337
960 898 384 751
Unallocated 65 64
Consolidated total assets 960 963 384 815
Total Liabilities
Lobster 12 820 6 421
Pelagics 11 258 7 625
Hake 4 757 3 711
Squid 7 124 371
Abalone 6 478 3 440
Processing and marketing 14 158 9 969
Administration and support services 60 929 55 908
117 524 87 445
Unallocated 72 341 71 890
Consolidated total liabilities 189 865 159 335
Revenue per region
United States of America 118 801 105 476
Far East 110 029 111 248
Europe 60 232 53 587
South Africa 121 671 131 381
Total 410 733 401 692
3. OPERATING ITEMS
Operating profit for the year is stated after accounting for the following:
Interest income from group companies 12 285 9 992
Management fee expense 12 480 10 524
Loss on disposal of property, plant and equipment 2 295 569
Loan written off 397 -
Loss on exchange differences 2 979 521
Amortisation of intangible assets 5 201
Depreciation on property, plant and equipment 14 258 13 407
Fair value gain on biological assets (6 153) (2 007)
4. HEADLINE EARNINGS
Earnings attributable to owners of Premier 68 100 52 108
Adjusted for:
Effect of loss on disposal of property, plant and
equipment gross of tax 2 295 569
Taxation effect (643) (159)
Headline earnings 69 752 52 518
5. MAIDEN DIVIDENDS BY PREMIER
Estimated dividend declared after reporting date (R'000) 39 000 -
Dividends per share (cents) 15 -
COMMENTS
FINANCIAL RESULTS
On 2 March 2017, Premier listed on the main board of the Johannesburg Stock Exchange ("JSE"). 117 000 000 new shares were
issued on listing date, raising R526 million in cash.
The Group delivered a satisfactory maiden set of results for the year ended 31 August 2017 with profit after tax increasing
by 31% from the prior year. The major reasons for the positive results achieved were as a result of excellent performance
across most of the Group's operating divisions. The pelagic division had lower than expected catches of pilchards industry wide,
compared to the prior period.
The Group's revenue increased to R411 million from R402 million in the prior year. During the year under review, the number of
shares in issue increased by 117 000 000 shares and due to this issue of new shares, the earnings per share and headline earnings
per share decreased by 7% and 6% respectively.
The stronger Rand had an impact on revenue but with cost controls and operational efficiencies offset some of the negative impact
on the business.
REVIEW OF OPERATIONS
Lobster
The Total Allowable Catch ("TAC") for the lobster season under review remained similar to that of the prior period. Good catches were
obtained for the period under review compared to the prior year which resulted in lower production costs and efficiencies, which resulted
in higher margins, which offset the stronger Rand. The west coast rock lobster quota available to Premier was 183 tons for the current season
compared to 180 tons for the prior season.
Operating profit in this division increased compared to the prior year as a result of good catch rates compared to the prior year. This
resulted in better margin extraction.
West Coast Rock Lobster
West Coast Rock Lobster Fishing rights are currently provisionally announced with a final announcement to be made shortly by the Department
of Agriculture, Forestry and Fisheries. See prospects below.
Pelagic
Revenue and operating profit in this division was lower than the prior year as a result of lower than expected pilchard catch rates experienced
industry wide. However, the industrial fish landings compared to prior year was in line with management's expectation that contributed positively
to the performance of this division.
Squid
The squid division had an excellent year compared to the prior period as a result of higher landings and greater sales volumes sold. The good
catch rates in this division resulted in lower production cost and efficiencies which resulted in higher margins compared to the prior year.
Excellent selling prices were achieved during financial year which contributed positively to this division's performance.
Revenue and operating profit increased significantly compared to prior period due to the excellent catch rates and greater sales volume compared
to the prior year.
Hake
The hake division is a joint venture between the Oceana Group Limited and Premier. This division continues to deliver good performance year-on-year.
Abalone
The abalone division delivered positive results for the year under review. Sales volume for the year were lower than the prior year as the Group
strategically decided to grow out the larger sizes for customers for the new financial year. The stock value increased by 13% from the prior year
and this volume will be realised in the new financial year. It is the Company's intention to increase the stock growth and holding value in line
with the abalone expansion plans.
The expansion plans are on target and the Group is set to have a fully grown farm by 2019/2020 to meet the strong international demand for its
product and brand. The closing stock value as forecasted in our Pre-Listing Statement indicated that the Group will have 119 tons stock on the
farm. Actual abalone stock on the farm closed at 126 tons exceeding forecast by 7 tons.
The live pack facility was completed and is fully operational for the period under review as per the Pre-Listing Statement. Phase 1 and 2 of the
solar project has been completed and is fully functional and financial benefits are being realised.
POST BALANCE EVENT
Shareholders are hereby advised that the Company through its subsidiary Premier Fishing SA Proprietary Limited entered into a binding Heads of
Agreement with Talhado Fishing Enterprises Proprietary Limited ("Talhado") to acquire a 50.01% stake in their business. The effective date of
the transaction is 30 November 2017 subject to conditions precedent in the heads of agreement. Talhado is the largest squid player in the South
African market and the acquisition fits in line with the Group's growth strategy to expand organically or through acquisitions. This acquisition
will also increase the diversification to our product basket. A SENS announcement in relation to the transaction was released on 18 October 2017.
As detailed in the SENS, the Talhado transaction is undertaken at a 4 to 6 times historic profit after tax multiple which is earnings enhancing
to shareholders of Premier.
FINANCIAL POSITION AND CASHFLOW
Total cash generated from operations before working capital requirements for the year under review was R77 million. There was an increase in
investment in working capital during the year of R28 million compared to the current year. The increase is mainly due to advances made to buy
wild abalone, contracted third party fish as well as contracted lobster quota holders for the 2018 season.
At year end the cash balance was R524 million.
MAIDEN CASH DIVIDEND DECLARATION
The Board of directors are pleased to announce that it has approved and declared a gross final maiden dividend of 15 cents per share for the year
ended 31 August 2017 from income reserves. The final dividend amount, net of South African dividend tax of 20% which equates to 3 cents per share
is therefore a net dividend of 12 cents per share for those shareholders that are not exempt from dividend tax.
The number of ordinary shares in issue at the declaration date is 260 000 000 and the income tax number of the Company is 9246036033.
The salient dates of the maiden dividend distribution are as follows:
Gross dividend (cents per share) 15.00
Dividend net of dividend withholding tax (cents per share) 12.00
Last day to trade cum dividend Tuesday, 30 January 2018
Trading ex-dividend commences Wednesday, 31 January 2018
Record date Friday, 2 February 2018
Date of payment Monday, 5 February 2018
Share certificates may not be dematerialised between Wednesday, 31 January 2017 and Friday, 2 February 2018, both days inclusive.
PROSPECTS
The successful listing of Premier during the year under review and the capital raised placed the Group in a strong financial position in order to
pursue its organic and acquisitive growth strategies.
The Group continues to focus on the expansion of the abalone farm which is scheduled to be completed by 2019/2020 with production capacity to
increase in excess of 300 tons of cultivated abalone.
The Group will continue to aggressively pursue acquisitions in the fishing industry to improve our synergy and diversification growth strategy.
The west coast rock lobster 2016 FRAP has been provisionally announced and Premier's allocation increased from 5.8% to 7.8% of the TAC. The Group
expects the Department of Agriculture, Forestry and Fisheries to announce the final list shortly.
DIRECTORATE AND STATUTORY INFORMATION
Directors: Reverend Dr Vukile Mehana (chairman) #*, Khalid Abdulla (deputy chairman)#*, Mogamat Samir Saban
(chief executive officer) *, Isaiah Tatenda Bundo *, Rushaan Isaacs*, Salim Young #*,Cherie Felicity Hendricks#*,
Aziza Amod#*, Takudzwa Hove#*, Rosemary Mosia #*, Clifford van der Venter #*, Arthur Johnson #*, Lavendra Naidoo #*
and Fredelaine Brand #*
* Executive directors
#* Non-executive directors
Registered office: Quay 7, East Pier, V & A Waterfront, Cape Town, 8001
Auditor: Grant Thornton Cape Inc.
Company Secretary: Nobulungisa Mbaliseli
Quay 7, East Pier, V & A Waterfront, Cape Town, 8001
nobulungisa@aeei.co.za
Sponsor: PSG Capital Proprietary Limited
Transfer secretaries: Link Market Services South Africa (Pty) Ltd
Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein, Johannesburg 2000
Postal address: PO Box 4844, Johannesburg, 2000
Telephone: +27 11 713 0800
Telefax: +27 86 674 4381
Website: www.linkmarketservices.co.za
Cape Town
24 October 2017
Date: 24/10/2017 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.